1. Field of the Invention
The present invention relates generally to automated tax return preparation and more specifically to proactively generating a new tax return based on a return from a previous year.
2. Background of the Invention
Completing a tax return for a taxpayer requires a considerable amount of information generated by a variety of sources. Personal and demographic information, as well as payroll, bank, and other types of data are surrendered to a tax preparer, manually entered into a tax preparation software, or painstakingly entered by the taxpayer into forms provided by various taxing authorities.
Although each year's tax return contains information specific to the year for which the return is being filed, a substantial amount of demographic and identity information often remains unchanged from year to year. In addition, the sources consulted to gain other types of information are likely to remain the same for many taxpayers. For example, as long as a taxpayer stays with an employer, the same employer payroll processor typically will provide income and withholding data for the taxpayer. The same is true of banks or other financial institutions that have continuing relationships with the taxpayer. In fact, in the absence of a significant event in the taxpayer's life—such as a move, job change, or change in marital or dependent status—a majority of tax returns may be substantially completed by using only information and information sources from the previous year's tax return.
What is needed is a system that can automatically prepare a taxpayer's tax return for a current year based on the taxpayer's return from a previous year.